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Stratasys(SSYS) - 2023 Q3 - Quarterly Report
SSYSStratasys(SSYS)2023-11-15 16:00
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Financial Performance - Total assets decreased from 1,259.79millioninDecember2022to1,259.79 million in December 2022 to 1,181.765 million in September 2023[4][5] - Cash and cash equivalents decreased from 150.47millioninDecember2022to150.47 million in December 2022 to 104.563 million in September 2023[4] - Revenues for the three months ended September 30, 2023, were 162.133million,comparedto162.133 million, compared to 162.192 million in the same period in 2022[8] - Net loss for the three months ended September 30, 2023, was 47.279million,comparedtoanetincomeof47.279 million, compared to a net income of 18.749 million in the same period in 2022[8] - Gross profit for the three months ended September 30, 2023, was 65.649million,downfrom65.649 million, down from 70.749 million in the same period in 2022[8] - Operating loss for the three months ended September 30, 2023, was 42.798million,comparedtoanoperatinglossof42.798 million, compared to an operating loss of 15.626 million in the same period in 2022[8] - Net loss per share for the three months ended September 30, 2023, was 0.68,comparedtoearningspershareof0.68, compared to earnings per share of 0.28 in the same period in 2022[8] - Comprehensive loss for the three months ended September 30, 2023, was 47.566million,comparedtoacomprehensiveincomeof47.566 million, compared to a comprehensive income of 17.88 million in the same period in 2022[8] - Net loss for the nine months ended September 30, 2023, was 108.118million,comparedto108.118 million, compared to 26.584 million for the same period in 2022[13] - Comprehensive loss for the nine months ended September 30, 2023, was 47.566million,comparedtoacomprehensiveincomeof47.566 million, compared to a comprehensive income of 17.880 million in 2022[9][11] - Net loss per share for Q3 2023 was (0.68),comparedto(0.68), compared to 0.28 in Q3 2022, and for the nine months ended September 30, 2023, it was (1.58),comparedto(1.58), compared to (0.40) in the same period of 2022[53] Expenses and Costs - Research and development expenses for the three months ended September 30, 2023, were 23.567million,slightlyupfrom23.567 million, slightly up from 23.145 million in the same period in 2022[8] - Selling, general, and administrative expenses for the three months ended September 30, 2023, were 84.88million,upfrom84.88 million, up from 63.23 million in the same period in 2022[8] - Stock-based compensation for the nine months ended September 30, 2023, was 23.744million,slightlylowerthan23.744 million, slightly lower than 24.755 million in 2022[13] - Stock-based compensation expenses for Q3 2023 were 7.5million,comparedto7.5 million, compared to 7.4 million in Q3 2022, and for the nine months ended September 30, 2023, they were 23.7million,comparedto23.7 million, compared to 24.8 million in the same period of 2022[66] - The Company recorded restructuring charges of 18.4millionduringtheninemonthsendedSeptember30,2023,including18.4 million during the nine months ended September 30, 2023, including 12.0 million under Cost of sales[31] Cash Flows and Liquidity - Cash flows from operating activities resulted in a net cash used of 53.912millionfortheninemonthsendedSeptember30,2023,comparedto53.912 million for the nine months ended September 30, 2023, compared to 57.289 million in 2022[13] - Cash flows from investing activities provided 10.845millionin2023,asignificantimprovementfromanetcashusedof10.845 million in 2023, a significant improvement from a net cash used of 23.987 million in 2022[13] - Cash flows from financing activities used 1.084millionin2023,slightlylowerthan1.084 million in 2023, slightly lower than 1.407 million in 2022[13] - Cash, cash equivalents, and restricted cash at the end of September 30, 2023, were 104.832million,downfrom104.832 million, down from 150.823 million at the end of September 30, 2022[13] Equity and Investments - Total equity as of September 30, 2023, was 883.143million,downfrom883.143 million, down from 948.726 million as of September 30, 2022[9][11] - Accumulated deficit as of September 30, 2023, was 2.18497billion,comparedto2.18497 billion, compared to 2.074462 billion as of September 30, 2022[9][11] - Stock-based compensation plans issued 1,017 shares in 2023, compared to 731 shares in 2022[9][11] - Stratasys completed the merger of MakerBot with Ultimaker, recording a net gain of 39.1millionfromthedeconsolidationofMakerBot[19][20]−TheCompanyrecognizedanequitymethodinvestmentinUltimakertotaling39.1 million from the deconsolidation of MakerBot[19][20] - The Company recognized an equity method investment in Ultimaker totaling 105.4 million, representing a 46.5% share in the new entity[20] - As of September 30, 2023, the equity investment in Ultimaker amounted to 88.4million,downfrom88.4 million, down from 100.2 million at December 31, 2022[21] - Stratasys acquired Covestro AG's additive manufacturing materials business for a total consideration of 59.7million,including59.7 million, including 53.8 million in cash payments and 5.2millioninordinaryshares[23][24]−TheCovestroacquisitionincludedintangibleassetsvaluedat5.2 million in ordinary shares[23][24] - The Covestro acquisition included intangible assets valued at 21.5 million and goodwill of 20.2million[27]−GoodwillasofSeptember30,2023was20.2 million[27] - Goodwill as of September 30, 2023 was 90.2 million, an increase from 65.0millionasofJanuary1,2023,primarilyduetoacquisitions[48]RevenueBreakdown−TotalrevenuesforthethreemonthsendedSeptember30,2023were65.0 million as of January 1, 2023, primarily due to acquisitions[48] Revenue Breakdown - Total revenues for the three months ended September 30, 2023 were 162.1 million, compared to 162.2millioninthesameperiodin2022[39]−TotalrevenuesfortheninemonthsendedSeptember30,2023were162.2 million in the same period in 2022[39] - Total revenues for the nine months ended September 30, 2023 were 471.3 million, compared to 492.2millioninthesameperiodin2022[39]−AmericasregionrevenuesforthethreemonthsendedSeptember30,2023were492.2 million in the same period in 2022[39] - Americas region revenues for the three months ended September 30, 2023 were 101.8 million, a decrease from 107.5millioninthesameperiodin2022[39]−EMEAregionrevenuesforthethreemonthsendedSeptember30,2023were107.5 million in the same period in 2022[39] - EMEA region revenues for the three months ended September 30, 2023 were 40.6 million, an increase from 31.5millioninthesameperiodin2022[39]−AsiaPacificregionrevenuesforthethreemonthsendedSeptember30,2023were31.5 million in the same period in 2022[39] - Asia Pacific region revenues for the three months ended September 30, 2023 were 19.7 million, a decrease from 23.3millioninthesameperiodin2022[39]−RevenuesrecognizedatapointintimeforthethreemonthsendedSeptember30,2023were23.3 million in the same period in 2022[39] - Revenues recognized at a point in time for the three months ended September 30, 2023 were 126.6 million, compared to 125.7millioninthesameperiodin2022[40]−RevenuesrecognizedovertimeforthethreemonthsendedSeptember30,2023were125.7 million in the same period in 2022[40] - Revenues recognized over time for the three months ended September 30, 2023 were 35.6 million, compared to 36.5millioninthesameperiodin2022[40]−DeferredrevenueasofSeptember30,2023was36.5 million in the same period in 2022[40] - Deferred revenue as of September 30, 2023 was 80.3 million, compared to 75.4millionasofDecember31,2022[42]−RemainingPerformanceObligations(RPO)asofSeptember30,2023amountedto75.4 million as of December 31, 2022[42] - Remaining Performance Obligations (RPO) as of September 30, 2023 amounted to 93.5 million, with 61.8millionexpectedtoberecognizedinthenext12months[43]LegalandStrategicMatters−StratasysterminateditsmergeragreementwithDesktopMetal,incurringa61.8 million expected to be recognized in the next 12 months[43] Legal and Strategic Matters - Stratasys terminated its merger agreement with Desktop Metal, incurring a 10.0 million termination fee[33] - Nano Dimension launched a hostile tender offer for Stratasys shares, ultimately offering 25.00pershare,buttheofferexpiredwithoutcompletion[34]−3DSystemsmademultiplemergerproposalstoStratasys,withthefinalofferbeing25.00 per share, but the offer expired without completion[34] - 3D Systems made multiple merger proposals to Stratasys, with the final offer being 7.00 in cash and 1.6387 newly issued shares of 3D Systems per Stratasys share[36] - Stratasys initiated a strategic alternatives process following the termination of the Desktop Metal merger agreement[37] - The Rights Plan expiration date was extended through December 31, 2023, to protect shareholder interests and prevent unauthorized control accumulation[72] - Nano Dimension filed a lawsuit against the company on April 25, 2023, challenging the legality of the Rights Plan, which remains unresolved as of November 15, 2023[73][75] Stock-Based Compensation and Equity - As of September 30, 2023, the company had 1,358,721 stock options outstanding with a weighted average exercise price of 21.03[67]−Unrecognizedcompensationcostrelatedtounvestedstockoptionswas21.03[67] - Unrecognized compensation cost related to unvested stock options was 2.5 million as of September 30, 2023, expected to be recognized over 2.4 years[67] - The unrecognized compensation cost related to unvested RSUs and PSUs as of September 30, 2023, is 51.26million,expectedtoberecognizedoveraweighted−averageperiodof2.52years[69]−TheweightedaveragegrantdatefairvalueofRSUsandPSUsasofSeptember30,2023,is51.26 million, expected to be recognized over a weighted-average period of 2.52 years[69] - The weighted average grant date fair value of RSUs and PSUs as of September 30, 2023, is 18.71[69] - The total accumulated other comprehensive loss as of September 30, 2023, is 12.958million,comparedto12.958 million, compared to 14.223 million as of September 30, 2022[70] Foreign Exchange and Hedging - Foreign exchange forward contracts not designated as hedging instruments had a notional amount of 57.2millionasofSeptember30,2023,withgainsof57.2 million as of September 30, 2023, with gains of 1.3 million and 2.6millionrecognizedforthethreeandninemonthsendedSeptember30,2023,respectively[61]−Thecompanyhad2.6 million recognized for the three and nine months ended September 30, 2023, respectively[61] - The company had 51.6 million in foreign exchange forward contracts designated as cash flow hedges for payroll and operating expenses denominated in NIS as of September 30, 2023[62] - Foreign exchange forward contracts designated as cash flow hedges for revenue included $20.0 million Euro to be converted into U.S. dollars as of September 30, 2023[63] Tax and Geographic Impact - The company's effective tax rate as of September 30, 2023, was impacted by geographic earnings mix, valuation allowance movements, and uncertain tax positions[56] Operational and Regional Impact - The company's manufacturing facility and global headquarters in Israel remain largely unaffected by the ongoing war as of the financial statement date[79]